County economy stuck on Wall Street

Published 12:01 am, Friday, June 28, 2013

For the first time in its history, New York City has bounced back from a recession without Wall Street leading the charge. Now experts say Fairfield County needs to do the same.

"Fairfield County had a rough year in 2012," said Jason Bram, an economist at the Federal Reserve Bank of New York, during the annual regional economic briefing held Thursday. The county's job market is hampered by a lagging financial services sector and the pounding the region took from Superstorm Sandy, he said.

Fairfield County's economy took a harder punch in the recession than neighboring New York, but unlike the city that never sleeps, which has bounced back with tech jobs, the Gold Coast of Connecticut has been hurt by a volatile Wall Street that continues to cut jobs instead of adding them.

But New York's differences should not be envied, say some county experts, they should instead be emulated.

The county's fortunes stand in stark contrast to New York City, according to the New York Fed.

Fairfield County lost 7.5 percent of its jobs during the recession and has recovered a little more than half of them, while downstate New York lost 3.9 percent.

It's an interesting story in New York City, Bram said.

"Every recovery in NYC has been led by Wall Street, until now," he said.

A variety of other industries, however, have taken the lead in the Big Apple.

In February of this year, 27,100 business services jobs were created in New York City, with a gain of 8,400 jobs in employment services, which includes temporary work, the U.S. Bureau of Labor Statistics reported. The city saw strong growth among professional, scientific, and technical services, with 4,300 jobs added in computer systems design and 3,800 in advertising. In all, the professional sector in New York City expanded by 3.6 percent while the national rate was just 3.1 percent for this sector. In the meantime, its financial sector shed 3,000 jobs.

Numbers for the same period for Fairfield County were not available. Statewide, Connecticut lost 600 jobs in finance and insurance in May and the industry was down 2,600 for the year.

The biggest areas of job growth for Connecticut during the recovery have been education and health, accommodations and food service and in the last year, construction. Manufacturing, which has been a bright spot, is starting to contract in the face of defense spending cuts.

Joe McGee, vice president of public policy at the Business Council of Fairfield County said the group has been worried about the area's overreliance on finance for several years.

McGee said, however, that New York's success, which was in the same boat, should serve as a model for the county and state. And he wants to see Connecticut do more than just imitate the Big Apple, he wants it to plug into it by improving the transit connections between the regions.

"New York City is the most innovative economy in the world," he said. "We've been pushing 30 minutes to Manhattan by train. It's not just we're going to New York in 30 minutes, but New York is coming to us."

McGee said the region needs to be more innovative and that's what efforts to expand the University of Connecticut's Stamford campus is about. But he also said the county has been diversifying, noting the growing presence of digital media operations in Stamford.

There is a need to diversify, he said, and create a desire for younger people to live and work here.

The younger workers are, however, still heading to New York.

The N.Y. Fed reported Thursday that new college grads might finally be catching a break in this economy after suffering through some of the worst job markets in 50 years.

Ralph Lim, a Darien resident and associate professor of finance and economics at Sacred Heart University, agreed with McGee that the state needs to connect itself to the City more closely.

However, he was unsure how Connecticut or the county can replicate in the near future the success that New York is having.

"I'd say it's challenging. I think New York City has tried to give more incentives to bring people in. I don't see us being very aggressive with tax breaks," he said, noting the state just canceled them for movies.